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B. Ramabhadra Raju Vs. Raghunanda Laxminarasamma and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Appeal No. 564 of 1980
Judge
Reported inAIR1981AP59
ActsRice Milling Industry (Regulation) Act, 1958 - Sections 5, 6, 6(1), 6(3) and 7(1); Rice Milling Industry (Regulation and Licensing) Rules, 1959 - Rule 4 and 4(1)
AppellantB. Ramabhadra Raju
RespondentRaghunanda Laxminarasamma and ors.
Appellant AdvocateV. Jagannadha Rao, Adv.
Respondent AdvocateA. Surya Rao, Adv. and ;Govt. Pleader for F. & A.
DispositionAppeal dismissed
Excerpt:
.....the rival rice-miller it is contended that when in fact, the rice mill was not fully established, the first respondent's assertion that it was established constitutes a misrepresentation as to an essential fact and as such the district revenue officer as well as the commissioner, civil supplies, were right in cancelling the licence granted to the first respondent. we are, therefore, clearly of the view that as the application for the grant of licence was made while the permit was effective, the licence was properly granted and it cannot be said that there was any misrepresentation, much less a misrepresentation as to an essential fact warranting cancellation of the licence......civil supplies, were right in cancelling the licence granted to the first respondent. that the permit granted on 1-11-1974 was effective on 30-4-1975, when the first respondent made an application for the grant of licence, cannot be in dispute for the permit is valid for a period of six months.during this period, the first respondent admittedly constructed the building for the mill, purchased the necessary machinery and in fact when the commissioner appointed by the district munsif visited the premises he found the machinery within the mill premises, but outside the building. in those circumstances, the first respondent's assertion while making the application on 30-4-1975 that the mill was established cannot be said to be a misrepresentation as to an essential fact. even the.....
Judgment:

Madhava Reddv, J.

1. This writ appeal is directed against the judgment of our learned brother Jeevan Reddy, J. allowing writ Petition No. 5138 of 1978.

2. The first respondent herein applied for the grant of a permit for the establishment of a rice mill and the Commissioner, Civil Supplies granted the same by an order dated 1-11-1974 under the provisions of the Rice-Milling Industry (Regulation) Act, 1958 (hereinafter referred to as 'the Act'). This permit was valid for a period of six months. During this period, the first respondent erected a rice mill and purchased the requisite machinery. Even before the expiry of the six months period, on 30-4-1975 he made an application for the grant of a licence under Section 6 of the Act. The licence was granted on 17-7-1975. One of the existing rice millers filed a suit, O.S. No. 57 of 1976 on the file of the District Munsif's Court, Cheepurupalli, for a declaration that the grant of the licence to the first respondent was not valid and for a permanent injunction restraining him from running the rice mill. That suit was decreed. But on appeal, the learned Subordinate Judge reversed the trial Court's decree and held that the rival rice miller was not entitled to file the suit and that he could only make his representation before the District Revenue Officer, who is empowered to cancel the licence on the ground of misrepresentation. That judgment of the learned Subordinate Judge has become final.

3. Thereafter, the rival rice miller, who is the appellant herein, made a representation to the District Revenue Officer stating that the writ petitioner had misrepresented that he had established the rice mill and obtained licence and as such the licence already granted should be cancelled. That objection found favour with the District Revenue Officer who held that the rice mill was not fully established by the day the application for the grant of licence was made under Section 6 of the Act. The first respondent carried the matter in appeal to the Commissioner, Civil Supplies, who confirmed the order of the District Revenue Officer and dismissed the appeal. As a result of the said order, the licence granted to the first respondent stood cancelled. These orders were questioned in the writ petition inter alia, on the ground that there was no misrepresentation as to any essential fact, that in fact the rice mill was constructed and the requisite machinery was also installed and only for the purpose of whitewashing it was removed and kept outside the building when the mill was inspected by the Commissioner appointed by the District Munsif while the suit was pending before him. The learned single Judge, on a review of the entire record, held that there was no misrepresentation as to any material fact which would justify the cancellation of the licence already issued to the first respondent who had constructed the building and also purchased the entire machinery and only electrical connections had to be made to the machinery. The appellant-third respondent got himself impleaded in the writ petition and opposed it. The learned single Judge after hearing him allowed the writ petition.

4. In this writ appeal by the third respondent in the writ petition, the rival rice-miller it is contended that when in fact, the rice mill was not fully established, the first respondent's assertion that it was established constitutes a misrepresentation as to an essential fact and as such the District Revenue Officer as well as the Commissioner, Civil Supplies, were right in cancelling the licence granted to the first respondent. That the permit granted on 1-11-1974 was effective on 30-4-1975, when the first respondent made an application for the grant of licence, cannot be in dispute for the permit is valid for a period of six months.

During this period, the first respondent admittedly constructed the building for the mill, purchased the necessary machinery and in fact when the Commissioner appointed by the District Munsif visited the premises he found the machinery within the mill premises, but outside the building. In those circumstances, the first respondent's assertion while making the application on 30-4-1975 that the mill was established cannot be said to be a misrepresentation as to an essential fact. Even the District Revenue Officer did not hold that the mill was not established at all. He only found that 'the mill was not fully established'. What all was required to fully establish the mill was to put the machinery already purchased in the building and switch on the electric connection. We, therefore, agree with the learned single Judge that there was no misrepresentation as to 'an essential fact' which is the condition precedent for exercising the jurisdiction under Section 7 (1) (a) of the Act for the cancellation of the licence already granted.

5. We find yet another ground on which the writ petition ought to succeed. Though that ground was not raised, we deem it necessary to refer to it in dismissing this appeal by the third respondent. Section 6 of the Act not only entitles the owner of an existing rice mill but also the owner of a rice mill in respect of which a permit was granted under Section 5, to make an application while the permit is subsisting, for the grant of a licence for carrying on rice-milling operation in that rice mill. Section 6 reads as follows:

'6. Grant of licences: (1) Any owner of an existing rice mill or of a rice mill in reaped of which a permit has been granted under Section 5 may make an application to the licensing officer for the grant of licence for carrying on rice-milling , operation in that rice mill.

(2) Every application under Sub-section (1) shall be made in 'the prescribed form and shall contain the particulars regarding the location of the rice mill the size and type thereof and such other particulars as may be prescribed.

(3) On receipt of any such application for the grant of a licence, the licensing officer shall grant the licence (on such conditions including, in particular, conditions relating to the polishing of rice), on payment of such fees and on the deposit of such sum, if any, as security for the due performance of the conditions as may be prescribed.

(4) A licence granted under this section shall be valid for the period specified therein and may be renewed from time to time for such period and on payment of such fees and on such conditions as may be prescribed.'

6. A reading of Section 6 makes it clear that not only the owner of an existing rice mill, but even a person, who has obtained a permit for the establishment of a rice mill, may make an application for the grant of licence, if the permit is effective. From the facts stated above it is clear that the permit granted to the first respondent was effective on 30-4-1975. Therefore, he is entitled to make an application for the grant of licence even though the mill was not fully established. No doubt, Rule 4 (1) (a) of the Rice-milling Industry (Regulation and Licensing) Rules, 1959, lays down that an application for the grant of a licence may be made by the owner of a new rice mill, who has obtained a permit under Section 5 of the Act, after he has established the mill within the prescribed period. But how far that rule can be said to be valid in the face of Section 6 of the Act is a matter to be considered. While Section 6 expressly authorises a person in whose favour a permit is granted, to make an application for the grant of licence while the permit is effective, Rule 4 of the Rules requires the rice milt to be established before the application could be made. The rule appears to take away the right of a person, whose permit is effective, from making an application, and hence may not be valid. Even if the mill was not fully established, under Section 6 of the Act, the first respondent was entitled to make an application. In that view of the matter also the fact that the mill was not fully established cannot stand in the way of a licence being granted to the first respondent and could not be made a ground for refusing the licence. Further, a reading of Sub-section (3) of Section 6 of the Act makes it dear that it is obligatory upon the authority to grant the licence on receipt of an application mentioned in Sub-section (1) of Section 6 on payment of the prescribed fees. Of course, in granting the licence, the licensing authority may impose such conditions as to improvements to the existing building and machinery etc. That also would show that even before the rice mill is fully established, when an application is made, while the permit is in force, the licence may be granted subject to certain conditions.

We are, therefore, clearly of the view that as the application for the grant of licence was made while the permit was effective, the licence was properly granted and it cannot be said that there was any misrepresentation, much less a misrepresentation as to an essential fact warranting cancellation of the licence. The facts disclose that the cancellation of the licence is highly arbitrary The permit was granted evidently on a consideration of the relevant circumstances necessitating the establishment of a rice mill in that area in public interest. The building has already been constructed and the necessary machinery has also been purchased and shifted to the premises If, at this stage, the licence is revoked on the slender ground that the machinery shifted to the premises has not been placed in the building and electricity connections given, that would work untold hardship on the first respondent; the public also would suffer for lack of rice-milling facilities which have already been found fay the competent authorities to be inadequate in that area. We do not therefore find any valid grounds to interfere with the order of the learned single Judge in this appeal. This writ appeal therefore fails and is accordingly dismissed,

7. Mr. V. Jagannadha Rao, the learned Counsel for the appellant, sought leave to appeal to the Supreme Court against this judgment. We do not think that this appeal involves such substantial questions of law of general importance as require the consideration of me Supreme Court It is also not otherwise a fit case for appeal to the Supreme Court Leave is, therefore, refused.


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